Some Hong Kong firms were interested in listing yuan-denominated shares in the city but did not want to lead the way, Hong Kong Exchanges and Clearing chief executive Charles Li Xiaojia said.

"Some Hong Kong companies have expressed interest in IPOs in yuan and Hong Kong dollars. We are in discussions with them, but they are shy about doing so. Each company is waiting for another to be the first to do such an IPO," Li said.

He made the comments at the listing of Hopewell Highway Infrastructure's (HHI) yuan shares in Hong Kong yesterday, the first equity security to be traded in yuan outside the mainland. HHI closed at 3.25 yuan (HK$4), just under 1 per cent up on its listing price of 3.22 yuan.

"This is an important milestone for the internationalisation of the yuan," Li said.

"This is an important precedent for Hong Kong-listed companies to get access to yuan financing channels. Mainland investors will be interested in yuan products in Hong Kong."

Although Hong Kong offered yuan shares, it was too early to predict how closely the exchange would work with those in Shanghai and Shenzhen, Li said, adding closer ties could not be ruled out.

With 600 billion yuan of offshore yuan deposits in Hong Kong, there was still not enough yuan liquidity in the city, Li said.

"But it will gradually grow in a virtuous cycle. More yuan products will create greater liquidity, and more liquidity will encourage more yuan products."

Hong Kong is the largest offshore centre for yuan deposits.

By offering the products, Hong Kong's exchange would be in direct competition with Shanghai's, Fung Global Institute research director Xiao Geng said.

"Before, all yuan products were in Shanghai and Shenzhen," Xiao said. "When Hong Kong has yuan IPOs outside China, this encourages competition and provides more choice for companies who want to raise funds in yuan. They can do it in Shanghai and Shenzhen - now they can also do it in Hong Kong."

Much has already changed in a year, according to Swift, a global co-operative of more than 10,000 financial institutions. Last year, financial institutions were trying to understand yuan internationalisation, but this year, yuan internationalisation was part of the strategy of most global banks, it said.

"Banks now have senior management looking into opportunities," a Swift paper released yesterday said.

This year, yuan deposits in Hong Kong had not grown for several reasons, including more investment options, it said.

"The decline in Hong Kong deposits shows the start of a movement towards yuan for investment purposes. This should be seen as a positive sign in the development of the yuan," it said.

This article appeared in the South China Morning Post print edition as Yuan I.P.O. s pique HK interest but no takers - yet